Many of our valued customers need assistance in planning their future and the safety of their families. We are here to assist with programs that protect their most valuable asset, their ability to earn an income!
Our various insurance programs help protect your family and your assets whether you live too long, die too young, or become disabled.
Your ability to earn an income is what pays for your residence, buys your car, and provides for your family.
Our retirement programs including IRA's, Annuities, 401Ks, pension plans, and permanent life insurance help make sure you are financially safe if you live too long.
Our life insurance programs protect your family from financial ruin should you die too young.
Our disability income policies protect you and your family from hardship should you become disabled.
Financial Needs Analysis can help you determine how best to plan for you and your family's future.
Certainly we must insure our home and the liability it entails, our auto(s) at least for the liability that comes with owning them, and our selves and family for medical needs as these exposures could wipe out our income if something major happens like an accident or llness. We recommend high limits to cover these liabilities.
Secondly, we need to determine your value in providing income and your needs to maintain your desired standard of living for you and your family.
Many financial experts have recommended a factor of 8 to 10 times your annual income for determining your life insurance needs, but we feel that is too simplistic for most individuals.
The following is a more direct effort to determine one's life insurance needs when trying to protect their family.
We start by reviewing debts that need to be paid off so our family doesn't have to endure hardship such as paying final expenses, the mortgage or the auto loan, or having to liquidate those assets. Then we look to the upcoming family needs including covering the cost of education or emergency expenses. Then we need to determine if there is a need for replacing your lost income to keep up a standard of living.
This is the amount calculated to meet this families financial needs in the event of death. Many financial planners estimate an income replacement factor of 7 times your current annual income after all debts are paid.
Disability Income Planning
Unfortunately, a disability lasting for more than 180 days is 8 times more likely than death at age 30 and 5 times more likely at age 50.
The only way to protect your standard of living is to purchase disability income insurance.
Typically the maximum purchase option is about 70% of your current income as benefits are typically not taxable and the insurance company does not want you to be in a position of making more money on disability than you could make working. But you must decide what amount of coverage you need and for what time period. These options vary based on your occupation and income. Most financial planners recommend replacing at least 50% and up to 70% of your monthly income with DI coverage for as long a benefit period available. You can also select a waiting period, usually 60, 90, or 180 days, as a waiting period prior to any benefit payments. Of course permiums vary based on these decisions.
Now we have a plan to protect ourselves and our family in case we die to young or become disabled.
Our next plan makes sure we have the cash and assets to maintain our standard of living even if we live too long.
The plan should entail an end result being the number required to generate the income necessary to maintain the standard you choose. Again we look at a desired monthly income to determine that number, so if we need $4000 per month after retirement and we believe we can earn a reasonable return of 4% then we need an annuity of $1,200,000. Of course there might be some other sources on income such as social security to assist with your retirement needs which you may want to include in your planning, but we must plan to take care of ourselves as there are no other guarantees in life.
We do recommend tax deductible means of saving such as IRAs, 401Ks, pensions and those related programs. Life insurance is one of the next best accumulation programs as interest accummulations are at least tax deferred. Certainly capital gains at least avoids taxes until the time of disposition.
Early efforts to begin these savings greatly affects the results as indicated below. In order to accumulate $500,000 at 4% interest at age 65, you must set aside the listed monthly investment starting at that respective age.Age Contribution
We also need to review for the potential of needing assistance in a long term care facility on in home health care. Unfortunately, government benefits are only available if you meet certain financial characteristics and most of us will need to use up our assets in order to qualify for those benefits. A good long term care policy can help protect your assets from being diverted to paying for your care in or out of a nursing home. Again early planning is important as the costs of these plans greatly increases with age. We begin by determining a benefit we might need for a period that could be encountered.
Today, cost of care facilities run from just over $100 per day to upwards of $300 per day in the some of the nicer facilities. That's an average of $73000 per year which can ruin a good retirement plan in a matter of just a few years.
The example below gives an indication of the costs at various ages and benefit periods for a $200 per day benefits with a 90 day waiting period.Age 2 year 5 year Lifetime